If you use our system, you may be familiar that we have various options for you in terms of creating financial records or documents. You can create proforma invoices, which we recently discussed here, as well as credit notes, prepayment invoices, estimates bills, receipts and more. We will focus on bills, receipts and invoices here as many users get confused on their differences and which one to send out.

If you have used our system for a while, you may be familiar with some of our invoicing options. You can issue a wide range of documents using InvoiceOcean SaaS that include a standard invoice, credit note, bill, receipt and pretty much everything needed to run our business in terms of bookkeeping and to a degree accounting. However, one document we also have you should definitely check out or get familiar with is the proforma invoice.

Some of the ways a client or business may try to do this is by asking you to do small projects, or less time-consuming project, on a pay-by-the-hour basis rather than a fixed rate. This will most likely benefit your client and not you because the client will know ahead of time you can finish the project quickly and pay you a meager amount for it based on the hourly rate they may try imposing on you. Make sure you discuss your options with your clients ahead of time as our system at InvoiceOcean offers various options for unit quantity on invoices.

Invoicing has changed over the years from a practice of pen and paper record keeping (if you really go back in time you can even mention inscriptions on clay) of transactions to a robust system of revenue and expense tracking that complies with government regulations and VAT collection. It is a way for a business to keep tracks of goods bought and sold through in itemized list.

Sending and receiving invoices varies around the world with each country having its own system in place that governs invoicing standards. However, general trends are followed among member states in the EU (for the most part), or states in the U.S. It is when we have to send invoices across farther geographical regions that we start running into barriers or real differences in the invoicing process.

An example of this is paying sales tax in the United States vs VAT rates in Europe and the United Kingdom. Another example is whether we pay the invoice based on the tax rate of the supplier vs customer, which can vary in different parts of the world. Finally, there are differences in what needs to be included on an actual invoice for it to be considered legitimate.

Digital invoicing has its quirks like every other form of digital transaction. Sometimes we may send an invoice to the wrong recipient through pressing the wrong buttons on our keyboards and thus the wrong e-mail address gets entered. If we click too often without thinking through repetition, we may be making small mistakes along the way that can cost us big in the long term.

What can be quite troubling is if we make mistakes with financial data. We may enter the wrong bank number and our payee will either not be able to send us payments or in the worst case scenario, it will be sent somewhere else. More often it is the small mistakes that can cost us big financially.